An investor is the one who invests capital in a startup with the expectation of receiving returns and/or an ownership stake.
With a motive to grow the entrepreneur, startup and fund working capital requirements, an investor along with expansion money provides experience, skills, and connections.
An investor may offer incredible business acumen and resources for the startup’s disposal that can get the business on the track towards growth.
With a positive investor relation, entrepreneurs will be connected with good projects and fruitful partnerships and maybe even back the entrepreneur’s next venture.
It’s the entrepreneur’s and the co-founder’s responsibility to strengthen ties with investors and have a productive relationship to position the startup for success.
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Below are some of the strategies that will help an entrepreneur build and maintain a positive relationship with an investor:
Explore The Relationship
Investors can act as valuable mentors. It is important for the co-founders to recognize the expertise the investor brings to the table. Exploring the relationship beyond capital helps the entrepreneur accelerate the business through effective mentoring.
Investors aren’t just investing in the entrepreneur’s idea; they’re investing in the entrepreneurs. Investors have the same aim as the entrepreneur, i.e, for the business to succeed.
An open, clear dialogue and effective brainstorming session help the entrepreneur to learn more about the business. It’s also very important to understand the investors’ concerns, in order to have lesser disputes and a harmonious relationship.
At the end of the day, an investor needs to know what they have invested in and what are they getting from it financially. They should be duly updated about major changes in the company, along with due updates on compliance.
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Keeping the investor informed helps the entrepreneur gain the investor’s confidence.
Communicate Achievements And Challenges
An investor appreciates regular updates on the startup’s progress. Most investors are not involved in the startup’s day-to-day business operations usually, but they appreciate updates on new partnerships, exciting deals or noteworthy new customers.
Providing information about the startup’s challenges at the right time ensures that the investor has time to come with alternative strategies.
Be Honest And Respectful
A positive relationship with the investor is rooted in honesty and respect. It’s always in the best interest of the entrepreneur to maintain transparency. Sharing regular updates and maintaining strong communication will only help develop a positive bond with the investor.
Like every relationship, an entrepreneur is bound to be at a crossroads with the investor at some point.
Succeeding, growing and failing are regular checkpoints in an entrepreneur-investor relationship, and it’s important for the entrepreneur to prepare to work through these challenges.